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FCC sets 4 year terms for AT&T-DirecTV deal: more fiber, cheap internet, net neutrality

July 24, 2015, 7:13 PM UTC
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It’s official: AT&T can complete its purchase of satellite TV provider Direc-TV (DTV) now that the FCC has now approved the final conditions of the merger. The approval was not a surprise but many have been wondering what terms the agency would impose on a deal that will create the country’s biggest pay-TV provider, and has implications for internet policy.

On Friday, the FCC published a news release that set out the terms AT&T (T) will have to follow. They are related to expanding broadband access and preserving competition, and can be summed up like this:

  • Expanding “Fiber to the Premises” to 12.5 million customers: under the deal, AT&T pledges to deploy high speed fiber internet offerings to millions. The FCC says this will help offset any reduced competition in the TV market.
  • Discount broadband for low-income consumers: AT&T will have to provide standalone broadband service (as opposed to a bundle of video and broadband) at a reasonable price to certain consumers.
  • Fiber to schools and libraries: AT&T’s fiber build out will have to reach schools and libraries, which are eligible for federally subsidized broadband rates.
  • Net neutrality for data caps: AT&T’s home internet service comes with data caps. To ensure comply with net neutrality rules, AT&T pledges it will treat all incoming video the same and not exclude DirecTV service from any such caps.
  • Report on interconnection deals: the FCC’s net neutrality rules only apply to consumers, and not at a deeper level of the internet where broadband providers connect to websites. To ensure AT&T doesn’t abuse its power at this deeper level (ie by throttling Netflix), it will have to disclose any “interconnection” agreements so the FCC can ensure they’re not unreasonable.

The terms will remain in place for four years after the merger closes.

The merger go-ahead and conditions were passed by Chairman Tom Wheeler and the agency’s two other Democratic Commissioners. One Republican Commissioner, Michael O’Reilly, concurred in part and the other, Ajit Pai, dissented in part.

The conditions set down on Friday are consistent with Wheeler’s larger priorities of expanding broadband, and making it affordable to all Americans. Earlier this month, the FCC and Google announced a program to bring free fiber access to a number of public housing projects.